Ratings agency Crisil, for example, said in a statement that the ambition to add 182 million tons of new steel capacities over the next 14 years under the National Steel Policy was unlikely to be achieved. Crisil’s doubts seem logical. After all, India has managed to add capacity at the annual rate of 55 million tons in the last decade.

The National Steel Policy 2017 projects crude steel production capacity of 300 million tons by 2030-31 from the present level of about 120 million tons and per-capita consumption of 158 kilograms of finished steel as against the current consumption of 61 kilograms. The policy also sees an increase in domestic availability of washed coking coal by 2030-31.

Crisil Research said that it expects 24-26 million tons of steel capacities to be added over the next five years, leading to aggregate steel capacity to rise to 140-145 million tons by 2021-22. Beyond this, Crisil said, the key factors that would determine the pace of capacity addition would be demand growth, continued government support, and pricing environment against the backdrop of global overcapacity led by China. Crisil has also projected a 6-6.5% growth in steel demand in India over the next five years, lower than the 7% annual growth rate projected by the government till 2030.

However, T. V. Narendran, managing director of Tata Steel (India and Southeast Asia), said in a statement that the policy would help “in realigning the enablers in paving the way for India to realize its potential by creating modern infrastructure and meeting the aspirations of its young population.” Tata Steel, he said, would work with the government to address supply-side issues like raw material availability and de-bottlenecking logistics constraints in realising the goals of the policy.

Some experts opined that the steel sector would not experience the impact of the National Steel Policy in the short term. The effect was more likely to be seen only in the medium to long term, since apart from adding nearly 180 million tons of green field capacity, a crucial aspect of the new steel policy was the focus on developing new, value-added steel products.

As I reported before, the Indian government, in the last year or so, initiated some protectionist steps for the domestic steel sector. In February 2016, for example, it had introduced a minimum import duty (MIP) on certain steel products for about a year to protect the domestic industry from cheaper imports. In the following months, it had also introduced an anti-dumping duty on some steel products from China and European countries, this year extending that duty on products from China for five years.